Soybean development is one of South Africa’s agricultural success stories. Its production has grown significantly since the dawn of democracy, from 67 700 tonnes in the 1993/94 production season to 1.6 million tonnes in 2017/18. This was stimulated by growing demand for soybean oilcake or meal by the animal feed industry. This, in turn, has been driven by an increase in the demand for high protein food, particularly poultry products. South Africa’s per capita consumption of poultry meat almost doubled over the past 17-years, currently estimated at 41 kilograms, according to data from the Department of Agriculture, Forestry and Fisheries.
To service the growing demand, South African agribusinesses, supported by the government, made investments to increase domestic soybean processing capacity from roughly 860 000 tonnes in 2012 to a level in excess of 2.2 million tonnes. This was also aimed at stimulating domestic soybean production, as part of an import substitution strategy. The farmers responded positively to these demand changes as evidenced by this season’s record harvest.
Underpinning this positive production response was an increase in area planted, technological improvements in the form of seeds, fertilizers and better farming practices, amongst others. In terms of plantings, the soybean area increased 14-fold over the past 24 years to 787 200 hectares in the 2017/18 production season. The contribution of the aforementioned better farming practices and technological advancements is apparent from improvements in yields, which increased by 60% from the 1993/94 production season to 1.97 tonnes per hectare this season.
One of the most notable technological improvements is the adoption of the genetically modified seeds (GM) in the early 2000’s which continues to spread across the country. In the 2016/17 production season, GM seed constituted roughly 95% of South Africa’s soybean plantings. Worth noting is that this is the only country in the African continent that produces GM soybeans. Therefore, it is unsurprising that South Africa continues to enjoy tremendous growth in soybean output, while production in other African countries remains pedestrian.
This success is not unique to South Africa, the world’s leading soybean producers such as the US, Argentina, Brazil, Paraguay, Canada and Uruguay all grow GM soybeans. In fact, about 75% of global soybean production in the 2016/17 production season was GM.
Most importantly, the investment in the expansion of South Africa’s soybean processing capacity, and improvements in production techniques have led to a success story in terms of import substitution of soybean meal (see Chart below).
More than 80% of the local consumption of soybean meal was imported in 2006/07, but this has now declined to less than 30%, thanks to growing domestic production.
Looking ahead, I foresee further expansion in South Africa’s soybean production, but this could possibly come at the expense of the yellow maize area, as both crops are grown in the eastern parts of the country. Ultimately, the farmers’ decisions in this regard will be informed by ‘price’ competitiveness of each commodity.
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